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Estimate vs. Contract?

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Big Dog Dan

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Discussion starter · #1 ·
I agreed to give estimates for different parts of a large project.

The owner was not willing to sign a contract for reasons I believe was because it was a large project and thus the full contract was indeed a large amount of money. However after 2 years he now wants to call the estimates a contract after shutting to project down. I told him if he shuts it down I will not guarantee any work we were in process of completing
Is this something anyone has run into?

99% of my estimates were paid to the amount I estimated them. No time frame was written.
 
#2 ·
You should really consider updating your best practices to include contracts no matter what. It's just risky business to not have them in place; it could really hurt your company. I find it concerning that you were okay with moving ahead on a huge project when the owner has you assuming he won't sign because he's fearful of all the cost he will accrue.

Pretending it doesn't exist won't make it go away, but him backing out of a non-contractual project will!
 
#3 ·
Estimates can be considered contracts. You are handing them a SOW with price and they paid you to start work. It's more enforceable from his position than yours.

Lesson learned, always have a contract in place before starting work or accepting a deposit.
 
Discussion starter · #4 ·
ApparatusTeam said:
You should really consider updating your best practices to include contracts no matter what. It's just risky business to not have them in place; it could really hurt your company. I find it concerning that you were okay with moving ahead on a huge project when the owner has you assuming he won't sign because he's fearful of all the cost he will accrue.

Pretending it doesn't exist won't make it go away, but him backing out of a non-contractual project will!
Click to expand...
Thank you
I do use contracts. I trusted this person very much and they trusted me.
Can you explain your last sentence?
 
Discussion starter · #5 ·
TNTSERVICES said:
Estimates can be considered contracts. You are handing them a SOW with price and they paid you to start work. It's more enforceable from his position than yours.

Lesson learned, always have a contract in place before starting work or accepting a deposit.
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OK so are you saying all my estimates are contracts and they can come back and hold me responsible for not doing the work?
 
#6 ·
If you offered to do certain work for a certain price, all he has to do is signal his acceptance - a down payment would do it, or asking you to commence work would, too.

He'd have an enforceable contract with you, in spite of it not containing all the wording you'd normally use.
 
#9 ·
Big Dog Dan said:
I see
So he shuts down the job before I complete my work. Am I liable for the incomplete work?
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That, I don't know. Normally, a court would divide things up in what they feel is a fair way. You would be entitled to be fairly compensated for the work you did, but not to compensation for work you didn't do.

If the work you didn't do was due to the job being shut down by the GC, and you're a sub to them, I wouldn't think there would be liability to the GC from that.

The building owner, however, may decide to sue anyone and everyone connected to the job, and I'd expect that if the GC hosed the customer and there is significant money involved that's going to happen.
 
#10 ·
Big Dog Dan said:
I see
So he shuts down the job before I complete my work. Am I liable for the incomplete work?
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That's where a contract comes into play. Now it's a he said she said situation. Basically, you are screwed.
 
#11 ·
Reread and saw it was estimates directly to the owner. If he closed it all down, he breached whatever contracts he thinks he has with you. I'd make sure he understands he has closed this down, and your obligations are thus terminated by him.

Plus, I'd recommend not abandoning any job until you have any contracts closed out in writing, so it can't be claimed that they terminated because you abandoned the job. Leave a $3 HF hammer or something on site with your name on it until it's wrapped up, or maybe an old $75 10" Craftsman RAS (no blade)- nobody steals those....
 
#14 · (Edited)
Estimates are estimates and not enforcable. However, if money was given to you based on the estimate and you started work: it could be considered a contract. I would talk to an attorney.
As far as you trusting each other.... big deal. Do you ever not trust someone you do business with? You mean to tell me you do work for people you dont trust?
Business is business, you need to cover yourself for misunderstandings and everything else.
The very nature of the word estimate means its not exact so perhaps you have a out.
On all estimates you should have a clause saying "this is NOT a contract."
 
Discussion starter · #16 ·
Windowcentric said:
Estimates are estimates and not enforcable. However, if money was given to you based on the estimate and you started work: it could be considered a contract. I would talk to an attorney.
As far as you trusting each other.... big deal. Do you ever not trust someone you do business with? You mean to tell me you do work for people you dont trust?
Business is business, you need to cover yourself for misunderstandings and everything else.
The very nature of the word estimate means its not exact so perhaps you have a out.
On all estimates you should have a clause saying "this is NOT a contract."
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So far I've talked to 2 lawyers and both say an estimate is not a contract. I also did not say( "The estimate was a not a contract") because the title of the Estimate says Estimate. Thank you
 
#17 ·
So then get said lawyer to send this party a letter stating such information.

Had my lawyer do this today for me cost me $150 but it went from an issue to the other party solving the issue before the end of the day.

In my books that's money well spent

Sent from my XP7700 using Tapatalk
 
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